By Les Selby, CMP, CMM
According to travelhotnews.com, IATA (the International Air Transport Association), on Oct. 19, adopted a resolution that will implement a new distribution standard that will “modernize airline retailing by enabling innovation in the way airline products are distributed, and making possible personalized offers to passengers who will have access to all airline products and services regardless of distribution channel.”
The announcement met with resistance from agency groups, because the agencies believe that the change will allow airlines to bypass the current distribution structure and make customized offers directly to travellers.
For most travel agents, their principal source of revenue is the fee they receive from the airlines and hotels for tickets issued and rooms booked.
If suppliers can use the traveller data that the agencies supplied during the initial booking to bypass the agencies for further transactions, the supplier can avoid paying fees and can increase their profits by eliminating the “middle man.”
Why is this issue of interest to a meeting and event planner?
As a professional who has worked for third-party planning companies, I have seen Procurement change our industry from a service to a transaction-based business.
With a focus on transactions, increased competition among planners has reduced planner profitability by promoting lower pricing as the principal differentiation among bidders for many RFPs.
There was a time (not many years ago) that the industry was based on a partnership between professional planners and suppliers.
The hoteliers, caterers and transportation companies worked with planners as partners – they relied on third-party planners to refer reputable suppliers to their clients and negotiate agreements that benefited all parties.
That partnership was based on relationships and ethics – everyone understood the roles of all parties.
But now technology has advanced to a point where suppliers can amass and analyze data collected from each transaction, and use that information to predict the behavior of the end clients and customize offers specifically for each individual.
To me, that direct approach creates an ethical dilemma: do suppliers owe any loyalty to partners who bring them business or are all dealings simply individual transactions where every party looks only to their own interests?
As an insider, I have to wonder if the planning industry is moving from a service profession to just a job?
Surely, technology shouldn’t be an excuse to dissolve the partnerships that have historically served the industry well and focus now only on our own interests.